Tenancy Agreement FAQ - United Kingdom-Wales

The problem with oral tenancy agreements is that they can be difficult to enforce. If a dispute arose, a court would have to hear evidence and decide whose version of the truth to accept. If there is a written agreement, courts will generally be obligated to uphold the terms of the written agreement even if they don't agree with them.

A residential tenancy agreement typically addresses the following:

• the type of property being let;
• the address of the property being let;
• the term of the tenancy and whether the tenancy is fixed or periodic;
• the amount of rent payable, how often and when the rent should be paid; and
• the provisions of any security/damage deposit.

In addition, a residential tenancy agreement may also identify the following:

• taxes that are payable by the tenant;
• landlord improvements and signing incentives;
• tenant improvements and signing incentives;
• landlord and tenant repairing obligations;
• who will pay for what utilities;
• whether the tenant can assign or sublet the property;
• notice provisions for termination of the tenancy; and
• insurance provisions.

A residential tenancy agreement is a tenancy agreement for your home. Governments have recognised the sanctity of the home and have extended increased protections to tenants by enacting laws that provide a minimum set of rights for tenants. Tenants cannot contract out of the rights contained in these laws.

An assured shorthold tenancy is a form of tenancy that is regulated by the Housing Act 1988. Most residential tenancies granted after 28 February 1997 are assured shorthold tenancies unless the tenancy agreement or a notice served by the landlord specifically states otherwise. Tenancies granted prior to 28 February 1997 can only be shorthold tenancies where a valid “notice of shorthold” was served prior to occupation and the tenancy was for a minimum of six months. Most residential tenancies will automatically become an assured shorthold tenancy under the following conditions:

• the tenancy was granted after 28 February 1997;
• rent is paid to a private landlord; and
• the landlord does not live in the same building as the tenant.

The following cannot be assured shorthold tenancies:

• tenancies granted by resident landlords;
• tenancies with very high or very low rents;
• tenancies granted by the Crown;
• tenancies of agricultural land or holdings;
• college accommodations; and
• holiday lets.

An assured shorthold tenancy lasts for a minimum of 6 months. The landlord and tenant can agree to have the tenancy last for a set term (e.g. 6 months or 12 months) or the term can be periodic. Once the initial period ends the landlord and tenant have the option of renewing a fixed term or allowing the tenancy to continue on a periodic basis. LawDepot’s tenancy agreement is not suitable for terms exceeding 3 years. You should consult a solicitor if you require a term longer than 3 years.

A House/flat share agreement is used for tenancies where only a room is being let and the common parts of the property (e.g. bathroom, toilet, kitchen and sitting room) are being shared. The landlord may or may not reside on the property.

There are 2 major differences between house/flat share agreements and assured shorthold tenancy agreements. First, assured shorthold tenancy agreements cannot be used by resident landlords. Second, assured shorthold tenancy agreements provide the tenant with greater protection from eviction than house/flat share agreements.

The parties to a tenancy agreement are the landlord and the tenant. The landlord owns the property and allows the tenant to use the property in exchange for monetary payments called rent.

In general, resident landlords are landlords whose only or main home is in the same building as the house or rooms which the tenant is renting.

The landlord's obligations are defined by the terms and conditions contained in the tenancy agreement and the laws specific to where the property is located. The most important obligation the landlord has is to allow the tenant peaceful enjoyment of the property.

The tenant's obligations are defined by this tenancy agreement and the laws specific to where the property is located. The most important obligations of the tenant are to pay rent on time and to not cause damage to the premises.

If you breach a term of the tenancy agreement you are responsible for correcting it. If you are the tenant, this may involve you paying money to fix any problems caused by yourself or your guests. If you do not voluntarily pay to correct the breach you can be sued for damages sustained as a result of the breach or even possibly evicted by the landlord.

A guarantor or surety is a person who agrees to pay any losses directly to the landlord should the tenant be unable to pay the rent, or otherwise breach the tenancy agreement.

If the property is shared by three or more tenants who are not members of the same family, then the property may be classified as a House in Multiple Occupation (HMO). If you are a landlord, you may need to register and license this property with the appropriate local housing authority. You must also have the property comply with the Management of Houses of Multiple Occupation Regulations 1990. If you are not registered and licensed or if you have any concerns please contact a local solicitor.

Note: Family members include partners, same sex partners, parents, grandparents, children, stepchildren, foster children and adopted children, grandchildren, brothers, sisters, uncles, aunts, nephews and nieces.

Only tenants and people listed as occupants may reside in the premises. The parties must agree to change the people listed as occupants or tenants. Children born or adopted while the tenant lives in the premises are automatically added to the tenancy agreement as occupants. Also, there may be laws which restrict the number of tenants/occupants in the premises if that number violates local health or safety standards for housing. Health and safety standards are typically expressed as 1 person per X square feet. The standard varies from jurisdiction to jurisdiction so if you are concerned, check with your local housing authority.

LawDepot allows you to choose from several different types of tenancy agreement terms.

Fixed End Date

A tenancy agreement with a fixed end date gives certainty of term for both the landlord and the tenant. It specifies the exact day the tenancy will end. The advantage here is that neither party has to give notice to terminate the tenancy agreement; it simply ends on the specified date. In a fixed end date tenancy agreement the landlord cannot increase the rent, or change any other terms of the tenancy agreement unless he specifically reserves the right in the agreement and the tenant agrees to the changes. If the tenant remains past the specified date the landlord can either accept rental payments and have the tenancy agreement continue as a month-to-month tenancy with the same rules as the expired fixed end date tenancy agreement, sign a new tenancy agreement, or start eviction proceedings against the tenant.

Fixed Number of Weeks/Months/Years

A tenancy agreement for a fixed number of weeks/months/years gives a start date for the tenancy agreement and the number of weeks/months/years that the tenancy agreement will run. (for example, the tenancy agreement could start on 1 September 2005 and then continue for a period of 18 weeks/months/years). The advantage here is that neither party has to give notice to terminate the tenancy agreement; it simply ends on the specified number of weeks/months/years. In a fixed term tenancy agreement, the landlord cannot increase the rent or change any other terms of the tenancy agreement unless he specifically reserves the right in the agreement, and the tenant agrees to the changes. At the end of the 18 weeks/months/years, the landlord can either accept rental payments and have the tenancy agreement continue as a weekly/monthly/yearly tenancy with the same rules as the expired fixed end date tenancy agreement, sign a new tenancy agreement, or start eviction proceedings against the tenant.

Periodic

A weekly/monthly/yearly tenancy agreement with automatic renewal (a periodic tenancy) will continue so long as neither party wishes to terminate the tenancy agreement. To terminate the tenancy agreement the landlord and tenant must give notice of their intention to leave as specified by statute. A landlord can raise the rent, or change the terms of the tenancy agreement in these types of agreements by providing proper notice as required by statute. At the end of the notice period the tenant must move out or the landlord can start eviction proceedings against them.

Usually, under a fixed term tenancy, neither a landlord nor a tenant can give notice to terminate until the term has expired (unless one of the parties has made a substantive breach of the agreement). For periodic tenancies, there is a legal minimum notice required by most jurisdictions. The tenancy agreement can specify a period longer than the legal minimum. The tenancy agreement cannot specify a period shorter than the legal minimum. If it does, the legal minimum notice will be implied into the tenancy agreement.

A landlord does not have the right to enter the let premises unless there is an emergency, for example a fire or gas leak, or he/she gives the tenant proper notice as defined by statute. So long as the proper notice is given, a tenant cannot refuse entry to a landlord.

A security deposit is a sum of money the tenant pays to the landlord to guarantee that the tenant will fulfill all obligations under the tenancy agreement. The landlord holds the security deposit for the term of the tenancy agreement to ensure that the tenant does not default on the terms of the tenancy agreement or otherwise damage the property. Should the tenant damage the property (normal “wear and tear” excluded) or if the tenant has not paid rent, the landlord is entitled to recoup the debt from the security deposit. Usually the tenant must provide the landlord with the security deposit at the start of the tenancy agreement. At the end of the term, the tenant will receive the deposit back minus any deductions for repairs/restoration.

This is governed by statute and may differ from jurisdiction to jurisdiction. The amount that can be charged is typically not more than the amount of two months rent for an unfurnished property, or up to three months rent for a furnished property.

The landlord can deduct from the security deposit when the tenancy ends and the tenant owes the landlord money for either unpaid rent or damage to the premises. The landlord cannot deduct for reasonable wear and tear on the premises (i.e. wear and tear that occurs just from living in the premises). The landlord can deduct for stains on the carpet or countertops, large holes in the wall, and missing appliances and other such things that are beyond reasonable wear and tear.

Prior to moving in the tenant and the landlord should walk through the premises and write down any existing damage. This written account is called an inspection report. The landlord and tenant should both get a copy of this report.

An inspection report will help prove what damage was or was not caused by the tenant for the purpose of deducting any damages from the security deposit.

Tenancy Deposit Protection refers to an initiative set up by the government to ensure tenants of assured shorthold tenancies get back deposits which they are entitled to get back. The goal of the scheme is to provide a system for handling and safeguarding deposits and to allow for alternative dispute resolution should any deposit-related conflicts arise.

When a landlord takes any money for deposits for an assured shorthold tenancy, the landlord must safeguard the deposit using a tenancy deposit scheme. There are three tenancy deposit protection schemes: one custodial scheme and two insurance-based schemes.

• The Deposit Protection Service (DPS), a custodial scheme, is free to use and is open to all landlords or letting agents. Under this scheme, the landlord places the deposit into a separately held account managed by the scheme. The service is funded entirely from the interest earned from held deposits. For more information, visit http://www.depositprotection.com or call 0870 707 1707.
• Tenancy Deposit Solutions Ltd (TDSL), an insurance-based scheme, is sponsored by the National Landlord Association and administered by Hamilton Fraser Insurance Services. It is open to all landlords and letting agents. Under this scheme, the landlord retains the deposit but pays a fee to insure the scheme against any misappropriation of the deposit. For more information, visit http://www.mydeposits.co.uk or call 0871 703 0552.
• The Tenancy Deposit Scheme (TDS), an insurance-based scheme, is open to all landlords and letting agents. Like the TDSL, the landlord retains the deposit and pays a fee to insure the scheme against any misappropriation of the deposit. For more information, visit https://www.tenancydepositscheme.com/ or call 0845 226 7837.

All schemes are supported by a call centre and an independent dispute resolution service. It is up to the landlord to choose which type of scheme to use.

From the day the landlord receives the deposit, the landlord has 14 days to safeguard the monies using one of the 3 deposit schemes. The landlord must provide the tenant with details of which scheme is to be used within those 14 days. Tenants can contact the scheme to confirm the deposit is being protected.

The prescribed information the landlord must give to the tenant can be found in the Housing (Tenancy Deposits) (Prescribed Information) Order 2007. You can view this legislation at: http://www.opsi.gov.uk/si/si2007/uksi_20070797_en.pdf

At this time landlords can choose how to provide information to tenants of the tenancy deposit scheme. While landlords can specify provisions of the scheme in the agreement, it is not mandatory. Usually, the information a landlord is required to provide to the tenant will be on forms generated by the scheme administrator.

You may specify any tenancy deposit protection provisions in the "Additional Clauses" section.

You can find out more about tenancy deposit protection at: https://www.gov.uk/tenancy-deposit-protection/overview

While the landlord typically has insurance, it only covers his/her property and liabilities. If the tenant wants coverage for his/her personal belongings or negligence, the tenant will need renter's insurance. The tenant should discuss what type of insurance he/she wants with an insurance agent.

Assignments and sublettings both occur when the tenant gives his/her rights under the tenancy agreement to a third party. The landlord typically cannot block an assignment or subletting without a valid reason. An assignment occurs when the tenant gives to a third party all of his/her remaining rights under a tenancy agreement for the entire term of the tenancy agreement. The original tenant no longer has any rights in or claims to the property. If a tenant assigns property, he can no longer be sued by the landlord, and cannot sue the landlord as all his/her rights are transferred to the third party. In a subletting the tenant can transfer a portion of the let space (e.g. a room in a house) or a portion of the tenancy (e.g. for 5 of the remaining 6 months of the tenancy agreement) to a third party. The original tenant retains his/her rights in the property. The original tenant can still sue and be sued by the landlord for tenancy agreement violations.

Signing incentives are bonuses the landlord gives to the tenant, typically for either signing a tenancy agreement or signing a fixed term tenancy agreement. They may include free month's rent or a rent decrease for the months of the fixed term tenancy. If the tenant breaches the tenancy agreement he/she typically has to pay back these incentives.

Schedule 2 of the Housing Act 1988 provides that a landlord can recover possession for holiday letting when:

• the tenancy is a fixed term tenancy for 8 months or less; and
• the landlord gives notice to the tenant that the tenancy may be recovered on this ground; and
• at some time during the last 12 months the property was occupied as a holiday letting.

Schedule 2 of the Housing Act 1988 provides that a landlord can recover possession for student letting when:

• the tenancy is a fixed term tenancy for 12 months or less; and
• the landlord gives notice to the tenant that the tenancy may be recovered on this ground; and
• at some time during the last 12 months the property was occupied as a student letting.